this is my first post, so don´t kill me if I say something stupid. just looking for some advice or hints in terms of my career. currently i´m working in the risk department of a fund of funds in europe. my job is well paid and safe. however don´t want to stay there forever, because life of a risk manager just sucks in the long run (at least in my opinion). now i´m looking to make the transition to trading and since my current firm is investing in funds, there is no opportunity to trade here. the problem is, that i don´t have a degree. i learned all the math and quant methods by myself. so when i´m looking for a junior trader position i just see all the ivy league quant graduate adds and i don´t think i will get an interview there. my focus is mainly on options since hedging with them is, what i do all day long. my question now is: does it make sense to make the transition now since the industry is totally getting hammered these days. i can imagine, there are lots of unemployed traders right now looking for a job, but i´m not quite sure about that. as i´m in europe, the main options business is about electronic market making (alloptions/optiver), but does it make sense to look for a peon job on the options floor in the US? are those still available? I don´t quite know, where to start. I know about trading when it comes to hedging but have no idea how to get into the business of a p/l driver. i also know about some arb strategies, that would work if i had a 50k+ infrastructure but it is not realistic to trade them on my own or walk to a firm and tell them, what i´ve got. any ideas? prop shops and arcades are out of question. i´m looking for a job and i don´t want to pay desk fees, "training fees" and upfront capital in order to start to trade. thank you everyone
Risk managers are always right as long as they are vague enough. Trading is much harder. Most traders lose.
Only thing I could suggest is for you to use your current job to talk to people in the mkt. If you can't talk to traders directly, communicate with your fellow risk-managers any way you can. They might give you leads. Eventually, you'll be able to get a useful connection that will pay off.
look for firms that really put a premium on risk and apply there.... Macro firms - GLG, Brevan Howard Options - Optiver Equities - Capital Fund Management, European divisions of Moore, Tudor, SAC, etc... Fund of Funds - EIM
Most likely, the worst mistake you will ever make in your life. Likely less than 0.5% of traders would progress to a longterm situation making the money you appear to be making now. Imagine yourself a year and a half from now, wishing you could get your old job back after blowing a lot of money and time, but competing with 50 others trying to get a job at the local restaurant waiting on tables...
I worked in risk management for a while and most of the analysts (including me) were constantly trying to get trading jobs. A few did, but in general we were in kind of a wierd position - overqualified for the junior jobs and not attractive for most senior jobs without trading experience. Also at both places I worked most of the entry level trading jobs were filled by people coming out of rotational training programs right out of school. And they made around $50k less than a mid-level risk manager. I'm not saying this is the case everywhere but this was my experience. I don't know anything about Europe, but if you were in the US I would say you need to get a degree for a shot at an institutional job. Not that you can't learn the skills on your own or on the job, but you will have a very hard time getting hired without one.
thanks everybody for your ideas. first of all, I know, that it is extremly hard to make it as a trader. most of the funds I hedge underperform, but the funny thing is: as long as they have a strong sales force behind them, the managers get paid a descend part of the management fee every year. so even if you don´t perform well managing, lets say an emerging market fund, as long as you loose less then the benchmark, you will be all right (and thats really easy by just collaring your stocks, capping downside risk). of course managing a total return fund is a different animal. i totally agree with the the analogy risk manager == wife and trader == husband. as risk manager you are always wrong if you hedge a fund, that is performing well you killed it´s return => moron if you hedge a fund that´s going south you didn´t hedge enough => moron in the end, I think it is better for me to either apply for another risk management job, that appreciates, what a risk manager does, or wait untill the markets are up to a level, where anyone who doesn´t make it as a trader at a descent firm could get another job easily. i don´t care about making less money as a trader then i´m making right now. my concern is about the exit. if i decided to make the change a couple of years earlier, it would have been easier to bail out and get a job as execution trader or broker. but right now, when even the former robots of LEH are flipping burgers at MacD or counting cash 14hrs a day for less then $2/hour at chinese banks, applying for a trading position really looks like suicide. @black diamond: I totally understand, what you are saying. in my company, there are quite a few ivy graduates every year, who get a job as trading assistant or execution trader. those guys know nothing (one guy asked how it could be, that there are so many differrent guys bidding and offering at the same prices in US - equities whereas there is only one guy in the orderbook in XETRA stocks, untill someone explained him, what ECN´s are) and brag about how many wise decisions they make each day (most of them are just executing orders or analysing funds). but none of us in the risk department would ever get a job as analyst or execution trader, because we "don´t know enough about the markets"